I’m sure you know how important it is to teach kids how to be responsible with money. Basic financial principles, including budgeting and saving for college, should be shared with your children at a young age. Here are a few activities to teach kids about money.
It’s easy for children to think that money just pops out of a machine. Explaining how to earn money through hard work, and then how to manage the money once they receive it, are both important lessons for kids.
The first step to teaching kids about money is giving them access to money. My son has daily responsibilities around the house and he earns a weekly allowance if everything is completed without having to be reminded. If you’re just starting out with an allowance, half your child’s age in dollars is a good rule of thumb for younger kids.
While your child should be allowed to spend a portion of their money, it’s your responsibility as a parent to teach them how to budget and save for things they want. Being financially responsible at a young age will set them up for success as an adult.
Once your kid is armed with an allowance, it’s easy for them to want to spend it all right away. Encourage them to donate a percentage to a cause that is important to them. Some ideas are donating to a local animal shelter, your neighborhood library, or other organizations that may play a role in your lives.
RAINY DAY FUND
Skip the traditional piggy bank that doesn’t allow you to see what’s inside. Instead, opt for a clear jar. Our family decided to use a mason jar and cut a small slot into the lid that allows us to easily deposit our change. Using the clear jar, children can see their savings growing.
Building a rainy day fund is a great way to teach financial responsibility, but to also encourage delayed gratification. I cannot tell you how many impulse buys sit unused and ignored in our play area and our home. Since we’ve focused more on teaching financial responsiblity to our son, he doesn’t ask us to buy him many things. For example, his Christmas wishlist had 8 items and his birthday wishlist had 5.
SAVE FOR COLLEGE
Building a rainy day fund is a great way to teach financial responsibility, but to also encourage delayed gratification. I cannot tell you how many impulse buys sit unused and ignored in our play area and our home. Since we’ve focused more on teaching financial responsibility to our son, he doesn’t ask us to buy him many things. For example, his Christmas wishlist had 8 items and his birthday wishlist had 5.
SAVE FOR COLLEGE
With the cost of college rising, and many college graduates being burdened with a large student loan debt, it’s important that we talk about how important it is to save for college.
One option to save for college is to utilize the MEFA U.Fund College Investing Plan. This is the name for the Massachusetts 529 college-investing plan. It’s a tax-advantage savings plan offered by the Massachusetts Educational Financing Authority managed by Fidelity. This summer, look for their U.Fund Dreams Tour tent at fun family-focused events in the greater Boston area. You’ll find them, for example, at the Barnstable County Fair, the Topsfield Fair, and the HubBub Festival in Copley Square.
At each of these events, children will be able to visit the “Dreams Tent” and engage in fun activities from a GIF booth to a “Savings Slinger” game! Both parents and children will gain a better understanding about the challenges of saving for college while having fun!
Money doesn’t have to be a taboo subject. If you want to ensure your children grown up to be financially responsible, begin the conversation about money today!
Have you done any creative things to help teach kids about money?